On 29 January 2014, the EU Commission published a decision leveling a fine against the members of a foam cartel. The cartel was between four producers of polyurethane foam, a type of foam used in mattresses, car seats and sofas. The four companies involved were Eurofoam, Carpenter, Recticel and Vita who were alleged to have conspired between 2005 and 2010 in several EU Member States to fix prices and pass on costs to consumers in order to avoid price competition between themselves.
Two EU Commission procedures were used in the reaching of this decision. Firstly, that of the leniency programme in that Vita came forward, exposing the cartel and was thus granted total immunity from fines. The remaining three cartel members, now implicated and under investigation, sought to plead guilty under the settlement programme bought about in 2010. Under this programme, there is a 10% reduction in fines by accepting liability and avoiding protracted and costly legal proceedings.
Further to the advantage of the Commission, under the settlement programme, the Commission does not have to disclose the evidence it holds against suspected cartel members and its evidence does not get put under cross examination.
The settlement and leniency procedures has proved highly successful for the Commission with over a 50% uptake of the settlement procedure alone. Their introduction has likely saved the Commission and ultimately EU taxpayers millions in legal fees and resources in cartel investigations. The procedures could provide a model for developing countries wishing to create pragmatic and effective regulatory competition regimes.